Reinsurance giant Swiss Re shrugged off natural disasters to report net profits of $2.6 billion for 2011 today, up sharply from the $863m recorded the previous year and higher than analysts had expected.
Net profits for the fourth quarter alone came to $983m compared to a loss of $725m over the same time the previous year, the company reported. The result is much higher than the $1.8 billion annual profit anticipated by analysts.
Premiums increased by only 8% to $21.3 billion over the period.
Natural disasters such as Japan's earthquake and tsunami and the earthquake in New Zealand, floods in Australia and Thailand, as well as hurricanes in the US impacted the firm's performance.
Operating income in the property and casualty sector was down 48%, or $1.3 billion on the previous year. Given the increase of natural disasters, the combined ratio, which measures the ratio between operating expenses and claims costs relative to premium income, worsened by 7.7 percentage points to 101.6%.
The group expressed optimism for the new year with a 20% increase in premiums in January. With its strong results, Swiss Re will offer its shareholders a dividend of 3 Swiss francs per share, compared to 2.75 Swiss francs in 2011.
